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Gold Hits 3-1/2-month High after U.S. Treasury Chief’s Comment-February 27, 2017
 

Gold reached its highest in 3-1/2 months on Friday as the dollar fell to a one-week low after the new U.S. Treasury chief poured cold water on the "Trumpflation trade" that had boosted the greenback this year. Treasury Secretary Steven Mnuchin said on Thursday that any steps U.S. President Donald Trump's administration takes on policy would probably have only limited impact this year, though he wants to see tax reform passed by August. The comments suggested much work was still needed on the sweeping tax plan. Spot gold was up 0.6 percent at $1,256.75 an ounce, having touched its highest since Nov.11 at $1,260.10 earlier, zeroing in on the 200-day moving average. U.S. gold futures settled up 0.55 percent at $1,258.30.
Also helping gold include a vacuum of U.S. domestic policy, real interest rates going down, the dollar going sideways, investors cutting bets on Trump’s policy stoking economic growth, global major stock markets falling down, risk appetite going down, and geopolitical jitters around the world. On technical front, gold touched the 200-day moving average of $1,260 with K-chart showing a good upward pattern. The yellow metal is expected to pick up further if it could successful cross over $1,260.
Silver rose 0.8 percent to $18.30 per ounce, having touched its highest in 3-1/2-months at $18.40. Silver has gained about 1.8 percent this week in what could be its ninth straight weekly gain. After crossing over the 200-day moving average, an upside trend was underpinned. The gold-silver ratio continued to drop and is expected to move up along the 30-degree angle.

 
Dealing Room, ICBC Beijing Branch
Huang Han


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(2017-02-27)
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